Question

An employer having an experience unemployment tax rate of 3.2% in a state with a standard unemployment tax rate of 5.4% may take a credit against a 6.2% federal unemployment tax rate of.

A) 5.4%
B) 3.2%
C) 6.2%
D) 4.8%

Answer 1

An employer with a state unemployment tax rate of 3.2% who pays these taxes can claim a credit of up to 5.4% against their federal unemployment tax rate of 6.2%. Thus, the credit they can claim is 5.4%.

Step-by-step explanation:

The question involves understanding how employers may take a credit against their federal unemployment tax liability based on the amount they pay in state unemployment taxes. An employer with a state unemployment tax rate of 3.2% in a state where the standard tax rate is 5.4% is eligible for a credit against the federal unemployment tax rate of 6.2%. The federal government allows businesses to claim a credit of up to 5.4% against their federal unemployment tax if they pay state unemployment taxes. Therefore, the correct answer here is A) 5.4%.